Following three consecutive weeks of gains, the bullish run in the Nigerian equities market was halted last week as sustained profit taking in market high capitalised stocks dragged performance all through the week.
Consequently, the benchmark index slid 1,065.49 or 2.74 per cent week-on-week to close at 37,862.53 points, causing the Year-to-Date and Month-to-Date return to negative at 0.64 per cent and 1.00 per cent, respectively. In light of this, investors lost N386 billion as market capitalisation went down to N13.716 trillion.
The bearish performance in the week was largely due to losses in Dangote Cement, Seplat Petroleum Development Company and Guaranty Trust Bank.
Sector performance was largely bearish as all indices, save the Insurance index which rose 3.55 per cent on the back of gains in NEM Insurance and AXA Mansard Insurance, closed in the red. The Oil and Gas and Industrial Goods indices fell by 5.94 per cent and 3.02 per cent on every trading day of the week to emerge as worst performers as losses in Seplat, Forte Oil, Cement Company of Northern Nigeria (CCNN) and Dangote Cement dragged the indices.
Similarly, the Banking index declined by 1.96 per cent by losses in UBA, Guaranty Trust Bank and Zenith Bank, while the Consumer Goods index depreciated by 0.50 per cent on the back of profit taking in Flour Mills Nigeria and Nascon Allied Industries.
During the week, President Muhammadu Buhari signed the 2018 Appropriation Act into law seven months after it was first presented to the National Assembly for deliberations, which showed no effect on the equities prices.
They noted that there may therefore be need for the government to demonstrate transparency and readiness to effectively implement the national budget, even as feelers among investors is that the huge increase in the budget size of N9.12 trillion has to do so much with the oncoming 2019 general elections, rather than the wellbeing of ordinary Nigerian folks.
Analysts at Afrinvest Limited stated that “the approval of the budget may be a necessary condition towards reflating the economy, fixing some of the nation’s structural imbalances and resetting Nigeria on a path of growth, but, the sufficient condition to achieving this will fundamentally depend on realisation and proper implementation in order for the budget to achieve the desired result.”
Stocks market performance for this week, analysts at Cowry Asset Management said that the local bourse will close flat in the green territory as investors take advantage of the low prices of some fundamentally sound stocks amid expected better half year results.